Expenses Not Covered Under Health Insurance Policies

These are two specific exclusions from coverage found in a typical individual health insurance policy.

Covered Expenses consist of the items and services listed in the policy in the sections entitled: “Participating Provider Services Subject to Co-Pay,” “Non-Participating Provider Services Subject to Co-Pay,” “Participating Provide Services Subject to Calendar Year Deductible”, “Non-Participating Provider Services Subject to Separate Deductible for Non-Participating Providers and Miscellaneous Benefits”. Expenses for these listed items must actually be incurred by the insured and medically necessary.

Medically necessary defined: The policy defines “medically necessary” as: any applicable confinement of an insured, as well as other diagnostic test, laboratory test, examination, surgery, medical treatment, service or supply listed therein that is provided to an insured:

1. by or at the appropriate order, or upon the approval of a provider;
2. for the medically recognized diagnosis or care and treatment of an injury or sickness;
3. in a manner appropriate and necessary for the symptoms, diagnosis or treatment of such injury or sickness;
4. according to and within generally accepted standards for medical practice;
5. in the setting and manner appropriate for the treatment of the injury or sickness;
6. not primarily for the convenience of an insured, family or a provider; and
7. not investigational or experimental in nature.

In other words, a treatment is medically necessary if it is ordered by your doctor for a medically recognized diagnosis, and the treatment and setting for the treatment is the general protocol for the symptoms or illness and not merely experimental. The treatment must be reasonable and appropriate for the sickness, which leaves it somewhat open to discussion and interpretation.

If you have been denied coverage because the company has deemed it not medically necessary, with your physician’s help, you have a chance of persuading your insurer otherwise by appealing their denial.

*Wording may vary from contract to contract and from state to state.

Case Studies: Expenses Not Covered by Health Insurance Policies

Case Study 1: Denial of Medically Necessary Treatment

Health insurance policies often contain exclusions for expenses deemed not medically necessary. In cases where a treatment or service is considered experimental, not supported by established medical protocols, or not recognized for the diagnosed condition, the insurer may deny coverage.

This can create challenges for individuals seeking coverage for treatments that fall outside the insurer’s definition of medical necessity. However, individuals have the right to appeal such denials and can present evidence, including medical opinions and research, to support the argument that the treatment is indeed medically necessary for their specific condition.

Case Study 2: Limitations on Covered Expenses

Health insurance policies typically outline the specific items and services that are covered under the policy. Any expenses not listed in the policy’s coverage sections may be excluded. For example, certain specialized therapies, alternative treatments, or cosmetic procedures may not be included in the covered expenses.

In such cases, individuals may need to explore alternative means of financing or seek supplemental insurance to cover these specific expenses.

Case Study 3: Out-of-Network Expenses

Many health insurance policies have network restrictions, meaning they provide coverage for services and treatments obtained from in-network providers. Out-of-network expenses, such as visits to non-participating doctors or hospitals, may not be fully covered or may not be covered at all, leaving individuals responsible for a significant portion of the costs.

This can result in unexpected financial burdens for policyholders who seek care outside their insurance network.